1. September 2007
Next? By Lisa Schofield Photos by Deborah DeGraffenreid
Free your business
Professional Employer Organizations (PEOs) leave businesses free to grow
Successful businesses do not remain static—evolution is only the employer-employee relationship. As NAPEO’s promotional
natural. Having a fundamental niche to fill makes a business literature reads, “PEO clients focus on their core competencies
stand apart from its competition and remain stable despite to maintain and grow their bottom line.”
shifting government regulations, demographics, and trends in “No matter what the business focuses on, its products or
demand for products and services. And having a core mission services, each business actually runs two businesses,” says Doug
to follow allows a company’s employees to remain fulfilled, Drosin, District Manager of the Florham Park office of the
loyal, and productive. But when a company is advancing, national PEO Administaff. “The first is the product or service,
managing its human resources (HR) can become as challenging and the second business is the business of employment. Every
as managing its business—especially when employee-related single business entity has one thing in common—its most
matters like health benefits, workers’ compensation claims, valuable resource is its staff.”
payroll, payroll tax compliance, and unemployment insurance Every functioning business typically has four systems, Drosin
claims are becoming increasingly complex. explains: sales and marketing, an operations system, a financial
Enter Professional Employer Organizations (PEOs), which system, and an information system that allows a business to
understand that human resources are a company’s most precious synthesize information to make decisions about where and
resource, but that without proper HR management, a business’s how to grow. A PEO such as Administaff puts into place a fifth
evolution can lead to extinction. system for personnel management. This single system pulls all
PEOs are neither staffing companies nor “headhunters,” the others together to bond the organization, says Drosin, and
as many people assume. Rather, according to the National enables it to achieve its goals more efficiently.
Association of Professional Employer Organizations (NAPEO), Does using a PEO mean giving up control? Absolutely not,
which is headquartered in Alexandria, VA, PEOs are separate says Glen Bromley, founder of Skyline Mortgage, headquartered
entities that provide expertise in human resources management, in Morristown. After opening his business with just four
thereby allowing their business clients to devote all of their employees within the past year, Bromley has grown it to
resources to operating the business and producing revenue. encompass five offices—three in New Jersey, one in California,
Utilizing a PEO enables a company to cost effectively outsource and one in Pennsylvania—and is set to soon open offices in
the management of its human resources, employee benefits, Florida and Texas. He hires his own staff, but Administaff does
payroll and workers’ compensation, and other issues related to the rest. Prior to founding Skyline, Bromley was affiliated with
another mortgage company, where he had persuaded the owner
From Left: Glenn Bromley of Skyline Mortgage (seated) with Jack
to work with Administaff. The experience of working with a
Lennox; Doug Drosin, Administaff district manager (Florham Park)
with Patricia North. [Continued on back]
NEW JERSEY & COMPANY | SEPTEMBER 2007
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DO NOT EDIT OR ALTER REPRINTS. REPRODUCTIONS NOT PERMITTED. © Entire content copyright by ScheinMedia and New Jersey & Company magazine. All rights reserved.

2. September 2007
GUIDELINES FOR SELECTING A PEO
The National Association
of Professional Employer
Organizations offers the
PEO was so liberating, he contracted with Administaff immediately for Skyline. following guidelines to
“I was much more interested in running my core business, sales, and marketing of my mortgage banking companies considering a
services than running the back office,” Bromley says. “I wanted competent and comprehensive HR coverage. relationship with a PEO:
I worked with Administaff with my last employer, for five years. We had 180 employees in 24 offices
throughout the U.S. and virtually no HR coverage whatsoever. Just having someone who cuts paychecks,
1 Assess your workplace to determine
someone who hires and terminates, and someone who handles benefits is not effective human resource your human resource and risk
development and management.” management needs.
Bromley should know. He has built, staffed and run HR departments during his career, and says that in
his current growth plan “there is no way that we could do it on our own as competently, efficiently and cost- 2 Make sure the PEO is capable of
meeting your goals. Meet the
effectively as this.” people who will be serving you.
For Sean Gallagher, vice president of operations for Barnegat-based Abaco Corp., making the decision to
bring in a PEO meant being able to let go completely of the HR duties and “not be bothered by this again.” 3 Ask for client and professional
Abaco is a facilities management corporation doing business in 19 states. As the firm grew, says Gallagher, references.
it became “very convoluted and complicated” to keep up with the various rules and regulations governing
4 Check the firm’s financial
medical benefits, workers’ compensation, and the legalities of each state in which Abaco operates. Abaco background, and ask for banking and
turned to Administaff. “For almost four years, this has been a solid business decision, as Administaff took a credit references. Ask the PEO to
tremendous workload off our business,” says Gallagher. “We had approximately 100 employees, but since demonstrate that payroll taxes and
[hiring Administaff] we have been able to restructure and reorganize our business and still do the volume we insurance premiums have been paid.
do with about half the people.”
Using a PEO as a co-employer relationship to help with hiring during an expansion, or downsizing
5 Check to see if the company is a
member of NAPEO, the national
during a restructure, says Drosin, can prevent internal chaos. “At end of day, we help companies have better trade association of the PEO industry.
employees,” he says. If a company has the right people doing the right things in the right way with the right
training, he explains, then that company will have a clear competitive advantage. “In general, whatever 6 Investigate the company’s
administrative and risk management
problems businesses have, they are likely created by people. Whatever solutions are put forth to correct those
service competence. What
problems are going to be presented and implemented by people.”
experience and depth does their
Managing HR is more like running a second business within a business than ever before, with healthcare internal staff have? Do any of
and employee litigation the two most burdensome areas. “The proliferation of lawsuits in this highly litigious the senior staff have professional
society has become rather mainstream in business owners’ consciousness,” says Bromley. At his last company, training or designations? Check to
he recalls, when an employee cited racial discrimination, “that could have blown up, but Administaff see if the PEO’s risk management
completely and immediately defused it.” xyz services have been certified by the
Certification Institute at
www.certificationinstitute.org.
7 Understand how the employee
benefits are funded. Is the PEO fully
insured or partially self-funded?
Who is the third-party administrator
(TPA) or carrier? Is their TPA or
carrier authorized to do business in
your state?
8 Understand how the employee
benefits are tailored. Determine if
they fit the needs of your employees.
9 Review the service agreement
carefully. Are the respective parties’
responsibilities and liabilities clearly
laid out? What guarantees are
provided? What provisions permit
you or the PEO to cancel the terms
Sean Gallagher of of the contract?
Abaco Management
Co. with Amanda 10 Make sure that the company you
are considering meets all state
Hamilton.
requirements.
For more information about Administaff, call 1-800-465-3800 or visit www.administaff.com.
The Publisher’s sale of this reprint does not constitute or imply any endorsement or sponsorship of any product, service or organization. ScheinMedia 845.340.9600.
DO NOT EDIT OR ALTER REPRINTS. REPRODUCTIONS NOT PERMITTED. © Entire content copyright by ScheinMedia and New Jersey & Company magazine. All rights reserved.